Would you do it? If so, where would you cross the line? A piece of furniture, a small loan, a renter lease, a car, student loans? How about a mortgage for a house you won't live in (not renting out the property)?
I recall a thread back at the old place where cosigning came up and it seemed like it was mostly members that live in the US that were against the idea considering the financial burden it can put on you if the person you're helping defaults, and with credit scores being a big deal here that can destroy your ability to be approved for things yourself.
Here's my situation. My wife just told me that she offered to cosign a mortgage to help her mom, and I expressed that I am absolutely against it.
For a quick bit of history, my mother in law has screwed over my wife's credit in the past (prior to us getting married) by not being able to afford a cosigned loan and hiding the fact that she couldn't afford it until my wife checked her credit and confronted her. Thankfully she has been able to build it back up over the years. Right now, her mom and her new husband are looking for a house, and when going to a loan officer today she found out that he hid the fact that he never removed himself from his previous mortgage with his ex-wife after the divorce, and since the mortgage payments are a few months late, his credit has plummeted and they are now not able to reap the benefits of what she assumed was pretty good credit. There's more that I won't get into, but there's so many red flags, and we're talking about $100k+ loans.
Am I overreacting? If so, please tell me why. If not, tell me everything that can go wrong assuming I don't already know. For the record, if she were to default on the mortgage payments, my wife would not be able to afford it on her own, and while I make good money, even together we wouldn't be able to afford a second mortgage on top of student loans and plans to have a kid. I trust my wife, and can only hope that she doesn't feel compelled to do this behind my back.
I recall a thread back at the old place where cosigning came up and it seemed like it was mostly members that live in the US that were against the idea considering the financial burden it can put on you if the person you're helping defaults, and with credit scores being a big deal here that can destroy your ability to be approved for things yourself.
Here's my situation. My wife just told me that she offered to cosign a mortgage to help her mom, and I expressed that I am absolutely against it.
For a quick bit of history, my mother in law has screwed over my wife's credit in the past (prior to us getting married) by not being able to afford a cosigned loan and hiding the fact that she couldn't afford it until my wife checked her credit and confronted her. Thankfully she has been able to build it back up over the years. Right now, her mom and her new husband are looking for a house, and when going to a loan officer today she found out that he hid the fact that he never removed himself from his previous mortgage with his ex-wife after the divorce, and since the mortgage payments are a few months late, his credit has plummeted and they are now not able to reap the benefits of what she assumed was pretty good credit. There's more that I won't get into, but there's so many red flags, and we're talking about $100k+ loans.
Am I overreacting? If so, please tell me why. If not, tell me everything that can go wrong assuming I don't already know. For the record, if she were to default on the mortgage payments, my wife would not be able to afford it on her own, and while I make good money, even together we wouldn't be able to afford a second mortgage on top of student loans and plans to have a kid. I trust my wife, and can only hope that she doesn't feel compelled to do this behind my back.
